November construction market overview

The ONS have released their Output in the Construction Industry September and Q3 2015 figures, showing that in Q3 2015, output was estimated to have decreased by 2.2% compared with Q2 2015 and between Q3 2015 and Q3 2014 estimated output decreased by 0.1%. In September 2015 estimated construction output decreased by 0.2% compared with August 2015 due to a fall in all new work of 2.4%, offset by an increase in repair and maintenance of 3.8%.

The Markit/CIPS UK Construction PMI registered 58.8 in October, down from 59.9 in September. This is still well above the neutral value of 50.0, marking two-and-a-half years of sustained output growth across UK construction, helped, in contrast to ONS figures, by the fastest rise in new work for 12 months. However, the pace of growth remains weaker than seen on average in 2014, but the latest result is still above the pre-election low of 54.2 seen in April 2015.

Global Construction Perspectives have published their report Global Construction 2030. The report predicts that the UK construction market will become the world’s 6th largest by 2030, but to do so $6.2 trillion needs to be spent on UK construction over the next 15 years. Worldwide output is predicted to increase by 85% into 2030, driven by growth in China, India and the US.

Savills have released their latest Total Commercial Activity Index. The research shows that on balance 12% of commercial developers reported growth in September 2015 compared to August 2015, which points towards commercial activity growth picking up.

The Key Note Market Report which evaluates the housebuilding industry in the UK over a 5-year review period between 2010 and 2014 has been released. Total value of new housing output in Great Britain grew by 30.4% in the review period showing that recovery in UK housebuilding is now underway.

The Nationwide House Price Index reports that in October 2015 house prices increased by 0.6%, with annual house price growth increasing to 3.9% in October 2015 up from 3.8% in September 2015. The Halifax House Price Index reports that in October 2015 house prices increased by 1.1%, and house prices in the last 3 months (August – October) were 2.8% higher than the preceding 3 months.

Skanska UK have reported Good performance and a strong order book by recording an operating profit of £24.8m in the first 9 months of 2015, and £1.299.5m of orders being booked in the same period.

Atkins UK have released their financial results for the 6 months to 30th September 2015 which shows that they have delivered good results. They report operating profit to have increased 11.3% from 53.0m in 2014 to £59.0m in 2015, and that revenue for the 6 months rose by 8.8% to £904.6m.